Landmark Victorian law makes wage theft punishable by up to 10 years’ jail

On 16 June 2020, the Victorian government passed the Wage Theft Bill 2020, introducing severe new criminal penalties for businesses found guilty of deliberate wage theft.

The legislation is the first of its kind in Australia and comes in response to a series of high-profile underpayment cases in recent years.

What is the new law?

The Wage Theft Bill 2020 law stipulates that employers will be held criminally liable if they:

• Dishonestly withhold wages, superannuation or other entitlements from employees
• Falsify or fail to keep an employee entitlement record to dishonestly obtain or cover up a financial advantage.

Employers who make honest mistakes or exercise due diligence in paying wages and other employee entitlements will not be subject to these offences.

The Bill will run alongside all other obligations an employer has under federal laws and industrial instruments it is subject to.

What are the criminal penalties?

Those found guilty could face up to 10 years’ jail time as well as fines of up to $198,264 for individuals or $991,320 for companies.

The Bill establishes the Wage Inspectorate Victoria as a new statutory authority with powers to investigate and prosecute alleged employee entitlement offences.

Why has Victoria passed this law?

The Wage Theft Bill 2020 has been in the making for several years. It comes after a raft of high-profile cases of underpayments, which compelled the Fair Work Commission to introduce new obligations around annualised salary arrangements in March 2020.

In May 2018, the Victorian Government committed to introduce new laws to make wage theft a criminal offence, featuring as a key promise leading into the 2018 state election.

The Bill was introduced to parliament in March 2020, where Victorian Attorney-General Jill Hennessy highlighted the spate of underpayment cases as evidence federal civil penalties under the Fair Work Act 2009 (Cth) were not a sufficient deterrent against wage theft.

“Employers who steal money and entitlements from their workers deserve to face the full force of the law, which will include substantial fines or jail time for the worst offenders,” Hennessy said.

“This problem is systematic – that’s why our laws will apply beyond wages and include allowances, gratuities, superannuation and other accruals such as leave, as well as ensuring directors and officers are held to account.”